NEW YORK — Two Bear Stearns executives who ran hedge funds that collapsed after betting heavily on the shaky subprime mortgage market were acquitted Tuesday of lying to investors — a defeat in the government's bid to punish fraud exposed by the financial crisis.
A jury in federal court in Brooklyn deliberated about eight hours over two days before finding Ralph Cioffi and Matthew Tannin not guilty of conspiracy and other charges in an alleged scheme that cost 300 investors about $1.6 billion and nearly caused the demise of Bear Stearns itself. The firm avoided bankruptcy in a rescue buyout by JPMorgan Chase & Co.
Both men had been charged with three counts of securities fraud and two counts of wire fraud. Cioffi was also charged with insider trading.
After the verdict, some jurors told reporters that they concluded the evidence against Cioffi and Tannin was flimsy and contradictory. Other suggested the pair were being blamed for market forces beyond their control.
'How much can two men do?' said Aram Hong."
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